You must have heard all the buzz about cryptocurrency in the past few years. It has really caught on, despite the initial naysayers. If you’re not clear about what cryptocurrency is, here’s the simplest way to explain it. Cryptocurrency is simply currency which uses digital files as money. It is not controlled by states or central systems, and functions via the blockchain. This means that it is a decentralized currency available to anyone who can access it. Furthermore, it is not issued by a central body. Anyone with the right equipment can ‘mine’ cryptocurrency. This equipment does not mean a simple smartphone and Spectrum mobile plans. Instead, miners need high-end graphic cards and processors to create cryptocurrency.
In recent years, cryptocurrency has reached such a peak, that there are hundreds of options out there. In fact, its mining has led to component shortages for computers and gaming console production all over the world. Every day, new versions of cryptocurrency pop up, and the intangibility surrounding it doesn’t make things easier. You might be understandably skeptical about cryptocurrency, but it is one of those assets which has proven its worth. So, you should try it out. Of course, you might be confused about all the options out there, so here are a few good ones you can consider.
This is the one that started it all. In fact, it still controls 40% of the cryptocurrency market share. It has the advantage of being the first starter, so its price, volume, and market cap are considerably higher than other options.
Furthermore, it is also making its entry into conventional markets. Some brands have started accepting Bitcoin as payment, and larger banks have also started incorporating Bitcoin transactions in their offerings. However, a single coin costs more than USD 50,000, and the price fluctuates often, so if you want a stable and complete investment, you might want to pick something else.
Ethereum stands out in this list due to the unique technology it offers. It is not just a cryptocurrency, but also has a network which allows users to create their own cryptocurrency. Therefore, despite its late entry in the market, it has already surpassed most cryptocurrencies. Currently, it only stands second to Bitcoin.
As it uses blockchain technology, Ethereum only has one lane for transactions. So, if the network is overloaded, transactions can take quite a long time.
This is the first cryptocurrency to offer international transactions. While most conventional international transactions take days on end, Ripple completes these transactions in mere seconds. In addition, it already has contracts with some of the biggest banks around the world, so is one of the mainstream cryptocurrency options.
Ripple really hit its peak in 2017, when its value jumped 36,000%. However, instead of just looking at the percentages, you should see what they mean in real numbers as well.
Litecoin, while it launched at around the same time as Bitcoin, didn’t catch on as well as its competitor. However, it completes transactions at 4 times the speed of Bitcoin, and has set the record for completing transactions in less than a second. Therefore, it holds potential for 2021, especially when 5G technology will make speed a high priority for a large number of people.
Like with most other cryptocurrencies, Bitcoin’s value is tied with Bitcoin. This means that any Bitcoin fluctuations will result in their prices fluctuating as well, albeit at a lower volatility.
Most cryptocurrencies hit their peak in 2017, and then tapered off. However, Binance Coin managed to maintain increasing prices after this time period as well. Therefore, it is one of the most stable and reliable options out there. In addition, it is one of the few cryptocurrencies set up by a company rather than tech developers.
One of the best aspects of Binance Coin is its commitment to a strong blockchain, so that its investors are secure. However, as it was set up by a company, many people tend to view its security protocols as lacking.
Tether is widely considered as the most stable cryptocurrency out there. This is because it is tied to the US Dollar. For every unit of Tether, there is one US Dollar in the Federal Reserve Bank. This is an excellent option for people worried about the intangibility of cryptocurrency.
However, there is no tangible proof of the claim that there is a dollar for every Tether unit out there. Therefore, there is some skepticism surrounding it.
Some Ethereum creators broke off and created Polkadot as a better option. Instead of the single blockchain lane, Polkadot has several, improving speeds immensely. It is also a great option for investors who like to have some control. Polkadot weeds out people who just buy it as a stock option and rewards genuine investors with decision-making power with network fees and such.
Stellar discovered a need in the cryptocurrency market, and decided to fill it. It acts as a bridge between conventional banks and blockchain, allowing for easy currency conversion. Its Lumens is basically a way to convert currency easily, without loads of extra fees and extensive hassle.
This basically makes it the perfect payment gateway for cryptocurrency, so is worth investing in for the upcoming year. However, if better competitors show up, this might not be a good option.
This has really been an exceptional case in 2021. This is because of the hype social media brings. It reached phenomenal levels, just because Elon Musk tweeted about it and encouraged people to buy it. It has become quite popular, but of course, this rise is not sustainable. It is not a wise investment, but is worth mentioning because it encapsulates how abstract cryptocurrencies can be. Therefore, it is always smart to do your research thoroughly and see what options fit you best.
In conclusion, cryptocurrency is a good option for investment. However, you just need to do proper research and compare different options properly.